o_e_l_e_o
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May 29, 2022, 02:15:58 PM |
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Instead, if you use one or two centralized exchanges, it will always come from those two bank accounts. This way, someone could link your outputs. I'm not sure I follow you here. Can you elaborate? If some random person is scanning the blockchain for deposits to Binance, they will have no idea about the fiat withdrawals from Binance or the fiat deposits in to your bank account, so they won't be able to use that information to link Binance deposits. If, on the other hand, we are considering some blockchain analysis company, government, three letter agency, etc., then Binance have probably already shared all your data with them and so your deposits are already linked together without you ever withdrawing fiat.
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n0nce (OP)
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May 29, 2022, 02:20:19 PM |
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Maybe a little off-topic, but this is another advantage of Bisq: probably every time you sell BTC for fiat, the money arrives in your bank account from a different sender. That's not helping: if I use reputable exchanges, my bank has less to worry about. If I often send/receive money to/from many different bank accounts, they'll have a reason to ask more questions. And it's not as if the bank wants spend money asking questions, but government forces them to do this. Government also doesn't tell them which questions they have to ask, so banks ask anything they can come up with just to be on the safe side to avoid high fines again.That's a good counter-argument, true as well. Maybe less questions, but I believe also potentially easier to trace. Instead, if you use one or two centralized exchanges, it will always come from those two bank accounts. This way, someone could link your outputs. I'm not sure I follow you here. Can you elaborate? If some random person is scanning the blockchain for deposits to Binance, they will have no idea about the fiat withdrawals from Binance or the fiat deposits in to your bank account, so they won't be able to use that information to link Binance deposits. If, on the other hand, we are considering some blockchain analysis company, government, three letter agency, etc., then Binance have probably already shared all your data with them and so your deposits are already linked together without you ever withdrawing fiat. For random persons it's not easy, but if you're from / with government, you could get information about bank transfers to your bank account and compare those to Bitcoin deposits on the blockchain of the same size. You're right though, that they can just get that information straight from Binance more easily. Anyhow; by just depositing BTC into a centralized exchange, it also links your inputs. Even if you get new deposit addresses; they're linked not on the Bitcoin blockchain, but within the Binance system. Not everyone, but certain people can surely get this information from the exchange.
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PrimeNumber7
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June 04, 2022, 07:01:35 AM |
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I'm not trying to hide transactions from government, they want to know far too much from me already. But I'm still careful selecting which inputs to link together.
Maybe a little off-topic, but this is another advantage of Bisq: probably every time you sell BTC for fiat, the money arrives in your bank account from a different sender. Instead, if you use one or two centralized exchanges, it will always come from those two bank accounts. This way, someone could link your outputs. 1] You send unlinked UTXO A to Binance 2] You cash out the amount to your bank account 3] You send unlinked UTXO B to Binanche 4] You cash out the amount to your bank account Even though they were unlinked, by sending them to the same exchange and subsequently the same bank account, they can be linked. Through Bisq, you could even sell one UTXO for fiat received via bank transfer, another for fiat received via Skrill, and another via 'cash in person'. Even if you receive deposits to different bank accounts or even different payment methods, it is possible for the government to get a consolidated view of all transactions you have received by getting information from various banks/payment services. The above may not apply to those receiving cash in person, although engaging in this type of transaction is generally risky, and has a high risk of you getting scammed, so instead of losing your privacy, you may just lose your money.
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LoyceV
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June 04, 2022, 07:31:41 AM |
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it is possible for the government to get a consolidated view of all transactions you have received by getting information from various banks/payment services. You're highly overestimating my government. Sure, they can do this when a team investigates a large crime, but not automated and not on a large scale. Just recently it was in the news their IT system can't handle reducing VAT on vegetables. I'm not even kidding ![Cheesy](https://bitcointalk.org/Smileys/default/cheesy.gif) And the information they have, they don't know what to do with. There's no way they're going to analyze dust transactions.
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PrimeNumber7
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June 04, 2022, 08:03:31 AM |
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it is possible for the government to get a consolidated view of all transactions you have received by getting information from various banks/payment services. You're highly overestimating my government. Sure, they can do this when a team investigates a large crime, but not automated and not on a large scale. Just recently it was in the news their IT system can't handle reducing VAT on vegetables. I'm not even kidding ![Cheesy](https://bitcointalk.org/Smileys/default/cheesy.gif) And the information they have, they don't know what to do with. There's no way they're going to analyze dust transactions. Sure, it is unlikely that western governments can successfully investigate on a large scale, however, the information is still available, long after the fact. If you argue that the government cannot monitor your financial transactions at scale, you might as well say that you have nothing to hide and take no steps to ensure your privacy.
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LoyceV
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June 04, 2022, 08:13:26 AM Last edit: June 04, 2022, 12:27:51 PM by LoyceV |
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If you argue that the government cannot monitor your financial transactions at scale, you might as well say that you have nothing to hide and take no steps to ensure your privacy. Privacy goes further than just government. I'm not required to report transactions, we have no capital gains tax. I just report my annual tax overview, and no individual transactions. So my privacy is limited by the things I'm required to report, and only for taxes (and banks). Other than that, I'm free to hide where I buy my coffee from the rest of the internet. I'm now completely following the approach of avoiding small change in my wallet. Manually picking a change destination makes each transaction only slightly more work.
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o_e_l_e_o
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June 04, 2022, 12:23:24 PM Last edit: June 04, 2022, 12:35:56 PM by o_e_l_e_o |
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The above may not apply to those receiving cash in person, although engaging in this type of transaction is generally risky, and has a high risk of you getting scammed, so instead of losing your privacy, you may just lose your money. If you take reasonable and sensible precautions (trading in well populated area during the day, not sharing unnecessary personal information, not carrying excess fiat or bitcoin, etc.) then trading bitcoin for cash is no riskier than trading anything else for cash, which happens millions (if not billions) of time every day all over the world. I'm now completely following the approach of avoiding change in my wallet. Manually picking a change destination makes each transaction only slightly more work.
My question then is: What are you doing with your change? I mostly avoid change by not creating any - careful UTXO selection, buying extra goods/services, leaving a tip, adding to fee, etc. You say you are manually picking change destinations instead - where are you sending it that you can still use it a non privacy breaking way? Some kind of instant exchange for Lightning?
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LoyceV
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My question then is: What are you doing with your change? I mostly avoid change by not creating any - careful UTXO selection Yes. buying extra goods/services Yes. You say you are manually picking change destinations instead - where are you sending it that it you can still use it a non privacy breaking way? Some kind of instant exchange for Lightning? Yes. Or a custodial LN wallet. Topping up webhosting works too, this one is great to combine with batching payments (which also reduces transaction fees). I noticed my post missed a word: I was talking about small change, not just any change.None of these are perfect solutions, but it's much better than consolidating many small inputs at once.
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o_e_l_e_o
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June 04, 2022, 12:39:20 PM |
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Or a custodial LN wallet. Two further questions then: - Does this not mean you have zero privacy from the owners of said wallet, who would be able to link several your transactions together by the way of the change outputs being deposited to your account with them?
- Which wallets will accept small on chain deposits and credit you with the same amount on a Lightning channel without taking a significant proportion in fees?
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LoyceV
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June 04, 2022, 01:02:47 PM |
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Does this not mean you have zero privacy from the owners of said wallet, who would be able to link several your transactions together by the way of the change outputs being deposited to your account with them? Correct. That's why I don't often do it, it's just one of many options I have. Or transfer funds to another LN wallet again. Which wallets will accept small on chain deposits and credit you with the same amount on a Lightning channel without taking a significant proportion in fees? BlueWallet doesn't charge anything to deposit, but takes 0.3 to 1% when making LN-payments. Each new LN wallet gives a new deposit addy. Phoenix Wallet charges 3000 sats minimum when you deposit. There are probably more LN wallets that can do this, but I don't know the rates for those by heart.
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n0nce (OP)
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June 04, 2022, 03:24:37 PM |
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I'm not trying to hide transactions from government, they want to know far too much from me already. But I'm still careful selecting which inputs to link together.
Maybe a little off-topic, but this is another advantage of Bisq: probably every time you sell BTC for fiat, the money arrives in your bank account from a different sender. Instead, if you use one or two centralized exchanges, it will always come from those two bank accounts. This way, someone could link your outputs. 1] You send unlinked UTXO A to Binance 2] You cash out the amount to your bank account 3] You send unlinked UTXO B to Binanche 4] You cash out the amount to your bank account Even though they were unlinked, by sending them to the same exchange and subsequently the same bank account, they can be linked. Through Bisq, you could even sell one UTXO for fiat received via bank transfer, another for fiat received via Skrill, and another via 'cash in person'. Even if you receive deposits to different bank accounts or even different payment methods, it is possible for the government to get a consolidated view of all transactions you have received by getting information from various banks/payment services. The above may not apply to those receiving cash in person, although engaging in this type of transaction is generally risky, and has a high risk of you getting scammed, so instead of losing your privacy, you may just lose your money. What I mean is: when I sell through Bisq, I get money from a private person and there's no reference to cryptocurrency in the 'reference' field. So I don't know how they'll want to link the individual transfer to Bitcoin, not to speak of linking multiple trades with different trading partners. Does this not mean you have zero privacy from the owners of said wallet, who would be able to link several your transactions together by the way of the change outputs being deposited to your account with them? Correct. That's why I don't often do it, it's just one of many options I have. Or transfer funds to another LN wallet again. Which wallets will accept small on chain deposits and credit you with the same amount on a Lightning channel without taking a significant proportion in fees? BlueWallet doesn't charge anything to deposit, but takes 0.3 to 1% when making LN-payments. Each new LN wallet gives a new deposit addy. Phoenix Wallet charges 3000 sats minimum when you deposit. There are probably more LN wallets that can do this, but I don't know the rates for those by heart. It's worth noting that both of these use instant exchanger APIs for this service; I know Breez uses https://boltz.exchange/, though it may be cheaper using this exchanger through the application, since they subsidize it a little. Subsidization may be restricted to just channel opening fees though; so I'm not sure about that.
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